"There is provision under the Karnataka Cooperative Society Act that five per cent of the sites can be given to people who have been nominated by the farmers," he told reporters here.
He was reacting to whistleblower and former BEML employee K S Periyaswamy's claim that Nair's niece and friend were not employees of the defence PSU and it was unlawful to allot sites to outsiders.
The land allotment has triggered a controversy with a media report claiming it was made at a time when complaints about Natarajan's role in the controversial Tatra defence truck deal were pending with the Prime Minister's Office (PMO) besides the Central Vigilance Commission and Ministry of Defence.
Responding to this, Natarajan said trying to "fix" the BEML management for the allotment was "absolutely unfair and against facts".
"The Management does not have any control, except on BEML employees. Therefore, trying to fix the management for allotments is absolutely unfair and against facts," he said.
He said the sites were alloted by a committee formed by BEML directors and of the total sites five percent would be alloted to those nominated by farmers from whom land is acquired.
On Periyaswamy's poser why Nair's niece and his friend returned the sites if there was no irregualarity in the allotment, Natarajan said perhaps Nair told his family members to return the land to avoid controversy.